Freightliner Expected to Lose $1.20 billion in 2001
Sep 26, 2001 12:00 PM
DaimlerChrysler AG's Freightliner LLC unit, Chicago, Illinois, largest maker and seller of heavy-duty commercial trucks in North America, expects to lose a record $1.20 billion for all of this year, and may permanently close two truck and parts-making facilities in Portland, Oregon, Stark's News Service Interactive has reported.
The automotive newswire said Freightliner generated an operating profit of $900 million last year. It said Freightliner executives revealed the dire financial outlook September 17 and September 20 separate meetings with local and state officials, and with a group of union officials at two Freightliner-owned facilities in Portland.
Stark's reported that Freightliner is seeking to reopen a three-year labor contract with unionized workers at the Portland plants to reduce wages, kill bonuses and future wage hikes-to possibly save the two Portland sites from permanent closure.
There was no guarantee that the closures would be avoided, the news service added. Stark's said spokesmen for DaimlerChrysler and Freightliner previously have declined to comment on reports about Freightliner's looming restructure.
The news service, citing company sources, said Freightliner lost more than $520 million during the first half of this year and does not expect to fully implement a recovery program, now in the final stages of formulation, until it is submitted to the parent firm's board during the second week of October 2001 for approval and formal adoption.
Stark's reported that a Freightliner executive told Portland union officials last week that, in addition to a $1.20 billion operating loss foreseen this year, nearly 30 percent of its dealers appear to be at the brink of bankruptcy as a severe downturn in local market demand for its commercial vehicles begins to widen in the wake of deadly terrorist attacks last September 11 in New York and Washington. The Freightliner executive also reportedly said the firm remains highly concerned about ongoing unprofitable conditions at three of its commercial truck assembly sites: St Thomas, Ontario, Canada. (Sterling Truck Corp), Kelowna, British Columbia, Canada (Western Star Trucks), and Portland (Freightliner-branded vehicle-making site), Stark's said.